5 Efficient Ways You Could Save On Your Taxes
We’ve all been there. April rolls around, and your CPA sends you a bill higher than you ever would’ve thought possible. The IRS got you again. And that thought goes through your mind, like it does every April… isn’t there anything I can do? Do I really have to pay this much in taxes?
Well, my friend, I have some ideas for you- five of them in fact. These ideas and strategies have the potential to save you boatloads of money in taxes over the years, keeping more money in your pocket… where it belongs! If you’d like to know what kinds of powerful ideas I'm talking about, keep reading… but first, I’d like to introduce myself!
My name is Jacob Andersen, and I’m a financial advisor here in Nampa, ID. My wife, Elise, and I moved here about a year ago, after spending one too many snowy winters in blustery North Dakota. I have a little over three years of experience in financial services- which means I might be the same age as one of your grandchildren ;). However, I have several licenses, certificates, and degrees to prove that I know my stuff when it comes to finance. In my time working at a Christian Fortune 500 organization, I have helped many people just like you make more informed decisions with their money. Namely, I help people prepare for retirement, pay less taxes, and take precautions to ensure that they don’t outlive their money.
That’s why I’d love it if you: finished reading this post to find out where you can save on taxes, and then: call my number at the bottom of the last page to schedule your own personal consultation, which is free. Some would say the advice is worth what you pay for, but others have found immense amounts of value from even just a 30-45 minute introductory meeting.
So, without further ado, here are five efficient (and legal) ways you could save on your taxes.
1. Municipal Bonds
Most people have heard of municipal bonds, but in case you haven’t, here’s what they are: Imagine that the mayor of the town you live in wanted to build a new bridge or hospital. They can ask investors (like you!) to help fund it, and in return, they’d make interest payments (usually 4 or 5%) to you every month. Sounds like a decent deal, right? Well here’s the real kicker: the interest payments come to you, tax-free! Sometimes they are tax-free at the federal and the state levels. Pretty sweet!
2. Roth Conversions
The second great way you could save is by implementing Roth conversions. A Roth conversion is simply taking money from an IRA or 401k, and putting it into a Roth account. While this strategy may not save on taxes immediately, it can make a huge difference in the long run. That’s because money in a Roth account grows completely tax-free and is never taxed again.
3. Fixed Annuities
The third way to potentially save on your taxes is one you can implement immediately- a fixed annuity. While these accounts do “tie up” a portion of your money for a set amount of time, Thrivent’s fixed annuities have no upfront costs whatsoever and can be a great tool to save on taxes. The benefit of a fixed annuity is that it is tax-deferred, meaning the account can grow over time without you having to pay any taxes on it! That makes fixed annuities different from savings accounts and CD’s, where you pay taxes every year on the interest. Fixed annuities can also be a great tool for guaranteed income in retirement at no cost to you.
4. Charitable Giving
The fourth way you could save on taxes is through charitable giving. As mentioned above, the company I work for is Christian, and generosity is a very important part of what we do for our clients. Giving your money to qualified causes (like your church or favorite non-profit) could save you a lot on taxes. When you’re 70, you could implement a strategy like Qualified Charitable Distributions (QCD’s) out of an IRA. Before then, you could open a Donor-Advised Fund or donate highly appreciated assets and receive tax benefits in return.
5. Timing Withdrawals Correctly
This is possibly the most important of the five strategies, because it not only affects your taxes, it could affect your Medicare premiums as well! Timing your withdrawals from Roth accounts, IRAs, and 401ks is no simple feat. It takes planning, not only for today, but for the years to come. The longer a person waits, the less options they typically have for controlling their income. That's why it’s usually better to start earlier when you have more choices.
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So that’s the list! There are five ways you could legally save on your taxes. Not all of them will be for everyone, and that’s okay. Each person has individual needs! That’s why I’m here to help. Our team has a combined 35 years of experience helping people just like you, and we’d love it if we were able to help you next :)
To discuss these strategies more in depth, and hear about what other strategies we’d recommend, schedule your free meeting with me at 208-504-2969, or shoot me an email at Jacob.Andersen@Thrivent.com. I’d love to tell you about the additional ideas we have and hear more about your particular needs.
Again, my number is 208-504-2969, and our team is located in downtown Nampa. You can call or email me to set up a time together.
Here are some Frequently Asked Questions people ask me:
Q. How long will the meeting be?
A. I like to keep meetings to about 45 minutes. It gives us enough time to get to know each other without taking up too much of each other’s time.
Q. What should I bring?
A. Feel free to bring any relevant statements or documents. Or just bring yourself! The meeting will be very laid back and I will walk you through everything.
Q. What if I already have a financial advisor?
A. That’s perfectly okay! Many of my current clients had financial advisors previously. It never hurts to have a second look at your current accounts.
God bless and take care!
Jacob Andersen
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For important disclosures, see thrivent.com/social. Thrivent and its financial advisors and professionals do not provide legal, accounting, or tax advice. Consult your attorney or tax professional.
